Bank for International Settlements

The Bank for International Settlements (BIS) is an "international organisation which fosters international monetary and financial cooperation and serves as a bank for central banks. ... The BIS commenced its activities in Basel on May 17, 1930, and is thus the world's oldest international financial organisation."

"The BIS emerged from the Young Committee set up in 1929, which was created to handle the settlements of German reparations payments outlined in the Versailles Treaty of 1919. The Committee was headed by Owen D. Young, President and CEO of General Electric, co-author of the 1924 Dawes Plan, member of the Board of Trustees of the Rockefeller Foundation and was Deputy Chairman of the Federal Reserve Bank of New York. As the main American delegate to the conference on German reparations, he was also accompanied by J.P. Morgan, Jr.[1] What emerged was the Young Plan for German reparations payments." 


 * Statutes (January 20, 1930; text as amended on January 8, 2001.

Mission: The BIS acts as:


 * a forum to promote discussion and facilitate decision-making processes among central banks and within the international financial community;
 * a prime counterparty for central banks in their financial transactions;
 * a centre for economic and monetary research;
 * agent or trustee in connection with international financial operations.

Legal status of the BIS.

"In common with many of its founding central banks in 1930, the BIS was given the legal structure of a limited company with an issued share capital. The Hague Agreements nevertheless established the BIS as an international organisation governed by international law with the privileges and immunities necessary for the performance of its functions. The international legal character of the BIS and the privileges and immunities which it has enjoyed in Switzerland since its foundation were confirmed in the Headquarters Agreement concluded by the BIS with the Swiss Federal Council on 10 February 1987. The BIS has a legal status comparable to that accorded to the many other international organisations established in Switzerland.

"A Host Country Agreement between the BIS and the Government of the People's Republic of China sets out the specific status of the Representative Office for Asia and the Pacific.

"Disputes arising over the interpretation or application of the treaties or Statutes of the BIS are referred to the Arbitral Tribunal provided for by the Hague Agreements. The governments of Belgium, France, Germany, Italy and the United Kingdom appoint the five members of the Tribunal.

"Disputes arising in matters of employment relations between the Bank and its officials or former officials, or persons claiming through them, are referred by the Bank's Headquarters Agreement and by the Host Country Agreement to the Administrative Tribunal of the Bank."

The gold franc

"The BIS employs the gold franc as a unit of account for balance sheet purposes. The gold franc has a gold weight of just over 0.29 grams of fine gold, which is identical to the gold parity of the Swiss franc from the foundation of the BIS in 1930 until September 1936, when the Swiss franc's gold parity was suspended.

"Assets and liabilities in US dollars are converted into gold francs at the fixed rate of USD 208 per ounce of fine gold (equivalent to 1 gold franc = USD 1.94). All other items in currencies are converted into gold francs on the basis of their market rates against the US dollar.

"The authorised share capital is 1,500 million gold francs, divided into 600,000 shares of equal nominal value (2,500 gold francs per share), of which 529,125 shares are issued. They are paid up to the extent of 25% of their nominal value (625 gold francs per share).

"When the BIS's initial capital was issued, part of the Belgian and French issues and the whole of the American issue were sold to the public. Approximately 14% of BIS shares remained in private hands at the end of 2000. After an Extraordinary General Meeting on 8 January 2001 amended the Statutes to restrict ownership of BIS shares exclusively to central banks, shares held by private shareholders were withdrawn against payment of compensation."

Balance sheet

"At 31 March 2002 the BIS's balance sheet total stood at 88 billion gold francs, with the BIS's capital at 331 million gold francs and published reserves at 3.3 billion gold francs. Expressed in US dollars, with gold at the prevailing market price, these figures corresponded to USD 173 billion and USD 7.3 billion respectively."

Board and Senior Officials (April 2003)
Board of Directors

--
 * Nout H E M Wellink, Amsterdam (Chairman of the Board of Directors, President of the Bank)
 * Lord Kingsdown, London (Vice-Chairman)
 * Vincenzo Desario, Rome
 * David Dodge, Ottawa
 * Antonio Fazio, Rome
 * Sir Edward A J George, London
 * Alan J. Greenspan, Washington
 * Hervé Hannoun, Paris
 * Masaru Hayami, Tokyo
 * Lars Heikensten, Stockholm
 * William J. McDonough, New York
 * Guy Quaden, Brussels
 * Jean-Pierre Roth, Zürich
 * Hans Tietmeyer, Frankfurt am Main
 * Jean-Claude Trichet, Paris
 * Alfons Vicomte Verplaetse, Brussels
 * Ernst Welteke, Frankfurt am Main

Related SourceWatch resources

 * bank
 * banking

Criticism

 * Andrew Gavin Marshall, "The Economic Recovery is an Illusion: The Bank for International Settlements (BIS) Warns of Future Crises", October 7, 2009.
 * James Calvin Baker, The Bank for International Settlements: evolution and evaluation (Greenwood Publishing Group, 2002).